World News
Maersk Line: Overcapacity Will Last at Least Five Years
Maersk Line CEO Soren Skou said Wednesday that overcapacity in the container shipping industry will continue for at least five years, Reuters reports.
"We will without doubt in five years time from now have an industry with plentiful capacity," Skou told the Reuters Nordic Investment Summit.
"We cannot create demand by lower prices.
"It is more important to remove capacity."
Maersk Line reduced its container capacity by about 1 percent between the second quarter of 2012 and the Q2 2013.
"If competitors follow Maersk Line's strategy and adjust capacity it will benefit the entire industry via significantly better freight rates," said Sydbank shipping analyst Jacob Pedersen.
Skou predicted that global demand for seabourne containers would rise 2 to 3 percent in 2013.
Thanks largely to lower fuel costs and more efficient routes, Maersk Line reduced its costs by 12.7 percent year-over-year in Q2, and it has been working to hike rates.
Maersk Line and CMA CGM were the only members of the 12 biggest container shipping lines to turn a profit in the first half of 2013.
Maersk Line, CMA CGM, and MSC are working together to reduce capacity and minimise wasted space on their ships through the P3 Alliance, which is expected to start operations in the spring of 2014.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 491.00 | 2.50 | 592.50 | 16.50 |
| Rotterdam | 445.00 | 13.00 | 593.50 | 11.00 |
| Houston | 443.50 | 6.50 | 601.50 | 5.50 |
| Fujairah | 487.00 | 10.50 | 711.00 | 12.00 |
| Global 20 Ports Average | 517.50 | 1.50 | 697.00 | 3.00 |
| Global 4 Ports Average | 466.50 | 3.50 | 624.50 | 0.00 |
| Global Average Bunker Price | 559.50 | 2.50 | 736.00 | 2.00 |
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